Missoula city and county: Legislature failed to provide meaningful property-tax relief
We agree with one part of Republican Montana Rep. Brad Tschida’s May 11 guest opinion in the Missoulian: Property taxes are a top concern of our residents. We vehemently disagree that fixing this system is the sole responsibility of cities and counties. But first let’s review Rep. Tschida’s assertions that he states as fact.
Tschida writes that cities and counties represent 85% of your tax bill while the state represents 15 percent. That is a false statement.
For a typical city resident, the City accounts for 30% of the tax bill. Local schools comprise 34 percent of the tax bill. Missoula County represents 21 percent, authorities like Mountain Line represent 4 percent and the State of Montana takes 11 percent for education. You can see the distribution of your tax bill on Missoula County’s excellent property tax website.
Tschida also writes that the City’s annual increase in property taxes since 2001 is 5.4% and attributes this increase solely to local government actions. He ignores the fact that Missoula is one of he fastest growing cities in the region. Over this time frame, Missoula’s tax base grew by an average of 2.1%, which is because residents and businesses invested in renovating and building new buildings.
Our total taxable value has grown 76.2% because property values, as determined by the State of Montana, increased. That happens in vibrant, growing communities. We’ll also note that state income tax revenues increased at 4 percent annually over the same time frame.
Rep. Tschida blames renters for the successes of ballot initiatives, ignoring the fact that a significant portion of rent payments goes to paying for property taxes. Rep. Tschida, and others, view residents who rent their dwellings as second-class citizens who don’t bear any property-tax burden, when in fact renters pay the bills for property owners and are subject to market forces, just like homeowners.
And those ballot initiatives pay for schools, open spaces, libraries, fire engines and more because local voters value those institutions and services. Our residents demand these services and support paying for them, but going to the same one-legged stool of property taxes is increasingly untenable.
Let’s talk about what the 2021 legislature did for property tax reform: The legislature passed HB663, which provides for a decrease in state property taxes offset by estimated marijuana revenues. The total funding for this bill statewide is $10 million, which is about 0.5% of all property taxes collected in Montana.
The legislature also reduced business equipment taxes (again). This will have the effect of further shifting the tax responsibility to homeowners and renters. In fact, Missoula’s tax base has shifted from 42.9% residential in 1999 to 59.0% in 2020. Legislative decisions have a major influence on the makeup of our tax base.
The legislature also overturned Missoula’s election on the local-option gas tax. This tool has been available through state law for decades, and Missoula County asked voters last summer to consider a 2-cent-per-gallon tax to help pay for critical road needs without further burdening property-tax payers. Missoula County residents voted yes on the question, but the legislature made the will of Missoula County voters moot and put the burden back on property-tax payers.
The legislature failed to approve any major property tax reform initiatives, such as a measure that would cap property taxes based on income or a local-option tourist tax that would have provided direct, meaningful property-tax relief for those cities and towns willing to ask voters for support. These tourist taxes, which are in place in Whitefish, Red Lodge, West Yellowstone and St. Regis, reduce property taxes for local residents and more than compensate for any sales tax locals pay.
Property -tax reform is a critical need for the state of Montana. But this can’t be done just by cities and counties. We hope Rep. Tschida sees local governments as partners leading to property tax reform rather than spendthrift enemies to be blamed for the problem.
Missoula Mayor John Engen
Missoula County Commissioners Dave Strohmaier, Juanita Vero and Josh Slotnick
Missoula City Council President Bryan von Lossberg
Missoula City Council Vice President Gwen Jones